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Huge tax hikes on liquor and cigarettes - Coffee Break - 08-29-2007 07:21 AM
Huge tax hikes on liquor and cigarettes
The Cabinet yesterday approved a drastic hike in liquor and tobacco taxes, citing a new government policy to reduce consumption and a much-needed reduction in treatment costs for those affected by drinking and smoking.
The tax hike on liquor, starting today, only effects local brands while the increase in tobacco tax covers both local and imported brands.
Prices for the locally-distilled "white liquor", with an alcohol content of 28 to 40 per cent, will be increased by Bt9 to Bt12 per 0.625-litre bottle or around Bt110 per litre - up from Bt70.
The rates for blended liquors, with an alcohol content of 38 to 40 per cent, will be increased by Bt9-Bt12 per 0.625-litre bottle.
The rates for brandies and other premium brands will increase by up to Bt90 per 0.640-litre bottle.
Local cigarettes will cost an extra Bt2 per pack, while imported brands will cost an extra Bt3.
The Cabinet said it expected the tax hike would result in a reduction of 60-65 million litres of local alcohol being drunk each year and a 20 million pack decrease in cigarette use.
Reactions from the liquor industry to the tax hike were mixed. Chatchai Viratyosin, marketing manager of Singha Corporation, said: "The tax increase for white liquor is too low for what it should be, when compared to other kinds of alcoholic drinks."
He said the tax level should correspond to the degree of alcohol content. "The government should have raised the white liquor tax to Bt240 per litre, to ensure fair competition among the wider alcoholic products.
"But nevertheless, it is a good sign, since the white liquor tax hasn't been increased for at least 20 years. I can still see some sort of state protection. But public pressure is mounting."
Viroj Chantaramolee, senior vice president of Thai Beverage Marketing, said the company's senior management would meet today to discuss the implications.
Zanita Kajiji, marketing manager of Diageo Moet Hennessy (Thailand), expected the company's products and market share to be affected.
Kwanchai Rungfapaisarn
The Nation
RE: Huge tax hikes on liquor and cigarettes - KoratCat - 08-29-2007 02:38 PM
It'll increase your chances to taste moonshine . . .
RE: Huge tax hikes on liquor and cigarettes - lukamar - 08-29-2007 04:41 PM
I don't understand the thinking of the government/junta and they sure don't understand politics and people. One thing every politician will tell you is the voter has a short term memory, what you did yesterday is more important than what you did last year. With 4 months before an election you give the constituents perks not taxes. Possibly they think that they did not lose the referendum by a big enough margin in some areas. The North and Northeast has the largest number of poor and is also the area that is affected most with a poor economy. When economies get bad people go to comfort items like drinking and smoking. It will make the election just that much harder for the junta backed parties to win in a lot of areas and this new tax may play into the PPP's hand. They can say see only we will make sure that you are looked after all the rest just want to keep you poor.